At a time when most industries are reporting flat to declining profits - postponing their expansion plans and shedding jobs - SA construction companies are bucking this negative trend. This is thanks, in the main, to the ambitious infrastructural spend of government.
Starting in late 2005 and early 2006, this spend is propping up several areas of the economy - which would be suffering were it not for this public-sector infrastructure boom. This expansionary spend includes World Cup stadiums, the Gautrain, improved ports, rail and pipeline capacity for Transnet, Eskom backlogs and expansion, more roads and airport upgrades.
WHAT IT MEANS
 Roads division nets largest contract yet
Order book stands at more than R6bn
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Says Marius Heyns, CEO of Basil Read, a listed construction group specialising in civils, road, mining, building and developments: "In the middle of an economic downturn, this broader sector is being supported by the enormous R600bn-plus government infrastructural spend."
He says Basil Read is certainly sharing in this infrastructural boom. "Our road building division has been awarded its largest contract to date - the R2bn Gauteng Freeway Improvement project consisting of three work packages - the Atterbury Interchange, N1 section 21 Atterbury to Scientia Interchange as well as the N1 section 21 Brakfontein Interchange, all in Pretoria.
"The Civils Division has also participated heavily in the Transnet Durban port upgrade projects. The Pier One reconstruction involved the refurbishment of the existing multipurpose terminal into a fully operational, modern container terminal. After Pier One, Basil Read then progressed with the construction of a truck staging area and car terminal in the harbour, and has been contracted to provide the complete infrastructure for Pier Two.
"This division is also looking forward to handing over a completed 45 000-seater Mbombela 2010 stadium in Nelspruit, despite some challenges from rainy weather and constant strikes. The stadium was built in partnership with French construction giant Bouygues, which constructed the 80 000-seater Stade de France in Paris."
Basil Read CEO Marius Heyns
In its mining division, Heyns says that despite the fact that commodity prices are under pressure, the division continues to perform well. "We remain selective in our projects and continue to focus on hard rock mining, such as diamonds, uranium and ferrochrome.
In the 2008 Sunday Times Business Times Top 100 Companies Survey, Basil Read took the top spot, followed by Digicore Holdings, with Highveld Steel & Vanadium in third place. The Basil Read turnaround story continues to capture attention and earn market respect, as the group has gone from close to bankruptcy in 2004 to rewarding its shareholders with an annual compound growth rate of 96% over the past five years.
With turnover of R3,5bn for the most recent financial year and starting off the 2009 period with a comfortable order book of more than R6bn, Basil Read's three-pronged strategy is paying off.
"We strongly believe in forging long-term and robust partnerships with international construction conglomerates and turnkey contractors such as Bouygues, Kalyx and Alstom, and international financiers such as Old Mutual.
A good showing - The firm has been involved in upgrading Pier One in Durban
"The second string to our bow is expansion, locally and internationally. We will position ourselves over the next 18-24 months to make sure we are well placed to take advantage of the global economic recovery when it comes. And thirdly, and particularly so in SA, we advocate strong public-private partnerships."
One of Basil Read's longstanding partnerships is with French construction group Bouygues, with a recent bid submitted for the new Munitoria project in Pretoria as well as an office block for the department of land affairs. Also, with UK contractor Kalyx, it is bidding for the correctional services facilities projects for the department of correctional services.
As retrenchments hit the daily headlines, Basil Read is in fact employing, with new hires averaging about 30 each month. For each employee in the construction sector, there are usually four to five dependants. In this poor economy, where consumers and particularly lower-income groups are struggling, Heyns says being able to take on workers is a positive factor.
Basil Read is broad-based black economic empowerment (BBBEE) level 4 compliant with the construction industry charter, which equates to 100% on the black empowerment scorecard.
"SA construction is experiencing an unbelievable boom and Basil Read is at the forefront of this rise, taking full advantage of the opportunities at hand. Our R5bn 2010 turnover target is well in sight.
"There is market sentiment that the construction sector will not be sustained beyond 2010. However, government has demonstrated its commitment to continued infrastructural development, particularly with regard to roads and power plants, and we are at the forefront of bidding for these projects with our various consortium partners."
